Can Fiscal Sanity Be Mandated?

California may be about to find out, if an initiative that’s breathtaking in scope gets onto the ballot.

A mentor of mine who is a veteran of the state-government wars often reminds me that crisis brings opportunity. If he's right—and I think he is—California is truly the land of opportunity.

Last year, the state's budget shortfall was pegged at more than $28 billion over 18 months. That's larger than many other states' entire budgets, and it was the third year in a row that California has faced such a massive deficit.

The 22-page document is ambitious in scope; indeed, many of its most important provisions seek to return fiscal sanity to California. To begin with, it would implement performance-based budgeting for all public agencies, requiring both the state and local governments to establish clear goals and focus their spending on achieving those goals.

GPAA also would make it easier for taxpayers to see what they're getting for their money. Transparency would be further be promoted by a provision that would require the legislature to devote part of its session to performance reviews of programs.

The measure would advance the cause of fiscal responsibility by actually forcing leaders to pay for the things they want to do. Lawmakers or governors who want to add costs or reduce revenue by $25 million or more would first have to identify where the money would come from.

It also would move California to a two-year budget, forcing budget writers to plan ahead and making it harder to substitute temporary gimmicks for needed reforms. The state would be required to develop and publish five-year budget forecasts, another provision that discourages gimmickry.

Governors in many states already have the power to unilaterally slash budgets once a fiscal emergency has been declared. GPAA would give that power to California's governors, who in recent years have needed it more than most of their counterparts.

No law can guarantee that legislators actually analyze bills before voting on them, but the initiative would require that legislation be available for three days before it's voted on, making it more likely that lawmakers at least know what they're voting for or against. GPAA would also end the practice of bypassing public hearings for controversial bills.

Another provision would provide financial incentives for local governments to work together and draft community strategic-action plans that would give the localities more flexibility to solve their own problems. While this may well be a good idea, GPAA is already breathtakingly ambitious and its backers might be better served to pursue another vehicle for getting into the weeds of empowering municipalities and providing incentives for collaboration.

Supporters have until May 29 to collect the more than 800,000 signatures they'll need to secure a spot for GPAA on the Nov. 6 ballot.

The initiative process is often the electoral equivalent of using a machete in places better suited to a scalpel. Indeed, initiatives have been part of what got the Golden State into this mess, tying state leaders' hands by dedicating revenue to specific items and mandating how dollars are spent. But as long as it doesn't get overly prescriptive, California's Government Performance and Accountability Act might just provide a road map to sustainability through enhanced transparency, accountability and common sense.